tv Worldwide Exchange CNBC October 1, 2015 4:00am-5:01am EDT
a very warm welcome to worldwide exchange. i'm wilfred frost. >> i'm carolyn roth. these are your headlines from around the world. >> stocks from asia and europe defy weak chinese data in the green with u. s. futures pointing higher. >> shares report on how canada's sweetening it's take over deal. but the firm tells cnbc no new approach has been made. >> shutdown averted. u.s. lawmakers work right up to the deadline to push through a
temporary bill but the stage is set for another budge battle in early december. >> washington disputes moscow's claims that it's war planes are only targeting iz lslamic state forces in syria. the pentagon warning russia's involvement will inflame the civil war. good morning, everyone. let's get you kicked off with some economic data in the form of euro zone september manufacturing pmi that came in in line with expectations. 52. let's have a look at the entire picture. years on manufacturing growth dipping in the month of september. factories are beginning to cut prices again and we did see the regional break down, the september german manufacturing pmi. that was a touch below expectations. france, though, the manufacturing picture looking better. back above the boom-bust line of
56 but spanish manufacturing pointing to a weaker picture in the third quarter when it comes to growth and the italian september manufacturing pmi falling to 52.7. the lowest since february. >> yeah, let's have a look at the markets because they're pretty strong today. it's not really based on that pmi data. it's a similar reason we saw yesterday. a strong rally at the end of the month and a strong rally now the following month. that's reacting from the weakness we saw monday and tuesday. so these big moves have become par for the course this week and last week. 1.5% gain in the stoxx 600. we opened strong and continued upwards. let's look at the individual markets and how that evening out. it's a pretty broad based rally. the dax up one and quarter.
let's put that in perspective because brent was down 3% for the month and 23% for the quarter. so these types of moves of course got to be looked at in a more medium term perspective and not just the short-term. brent you to 48.8 today and wti up to 45.7. let's also check in on markets in asia. sri is here with us this week and next. >> lovely to see you wilf. let's take a look at the asian markets. we have quite a lot of data and i wanted to focus on the boj tanker. we did see deterioration for the large manufacturers but hsbc highlighting some silver linings. they remained upbeat and we've also see the firms continue to pencil in some aggressive fy 15 capital spending and on top of
that the labor market is still tight. it's not a foregone conclusion that we could see an increase in asset purchases by the boj. not necessarily a foregone conclusion that we could see policy action in other words by the bank of japan next week which meets to review policy but let's not rule anything out. in the meantime, nikkei 225 closing 2% to the good. you're not seeing any quotes for the high in a market because shanghai is closed for a two-day holiday today and tomorrow. let's take a look, commodities back in favor to a certain degree. we're up by 1.8%. so all eyes are going to go to the states and with the non-farm payrolls at the end of the week and if we do see a solid number that could put some pressure on the commodity currencies yet again and also the emerging market currencies like the
ringgett and the rupee which are the two worst performers in the asia region so far this year. >> right. that is where we stand in asia as we wrap up the first trading day. carolyn, back to you. >> thank you for that. breaking news coming through from toshiba in japan. the ceo planning to step down within three years. he hasn't been on the job too long. he has just been put in that position after the big shuffle as a result of a counting scandal. he says he may step down within three years. he's also saying he may lay off appliances, tv, and pc workers. some of that has been outlined by toshiba's ceo. >> you did pronounce that correctly. >> how do you know? >> i'm an expert on japanese
pronunciations. morgan stanley revised down it's 2016 growth forecast for the euro area. it now expects the euro zone to grow 1.9% next year down from an original estimate of 2.2%. joining us is the european economist at morgan stanley. let's just quickly kick off with the pmi data that we saw around about five minutes ago. we of course got euro zone manufacturing pmi, 52.0. that was in line with forecasts. fractionally down from the august reading of 52.3 but given that we've seen so much volatility and uncertainty, the fact that that has come in as expected, 52.0, is that a little bit of a positive for the euro zone? >> surely it is positive. there's a sense of resilience in the region which is remarkable considering like you say what's going on in the global economy and markets as well. and pmi move sideways for the
region as a whole. we had other business surveys with a stronger history and surprised the upside. that is for germany but also for france and italy as well. they all point to a rather steady pace of growth, low to be sure but continuously positive going into the fourth quarter of this year and this is why even though there's a sense of downward revisions in the forecast, those revisions are quite small because there's three offsets. why is the flip side of what's going on in the emerging market world? there's lower oil prices. that means you pay less when you drive to work in the morning and go back in the evening. number two, fiscal policy is likely to turn more expansionary. all countries are planning to cut taxes from france and italy and spain and a negative sentiment again has remained
quite resilient. >> what about the euro, though? yes this performance in the pmi is relatively supported given the global growth outlook but also impressive given the fact that the euro has strengthened over the last couple of months but up above 111. how much pressure is that putting on the economy? are you impressed that the manufacturing pmis have been resilient in the face of it? >> i think that the euro level is for the euro zone economy. at least not just yet. yes, there's been some appreciation and the currency hasn't fallen like some may have forecast only a few months ago. it didn't really go close to parity and the reality is the level is competitive, it's not a big threat for euro zone exports at the moment. if anything, there's long lags when it comes to the currency. chances are the weakness that we
have seen is yet to materialize. that will be supportive for some time. >> i want to look ahead to this weekend and also take a look at the political risks still out there and we have the portuguese elections but portugal is different from the likes of greece and spain for example because we haven't seen the formation of a major protest party. against this backdrop, how big of a risk are these portuguese elections really. >> it is quite mainstream. it has to do with economic policy. it will be more on the portuguese consumer. it is more about cutting corporate taxes. but by and large there's less of a sense of political risk as in something going wrong like in greece during the period of heightened uncertainty.
spain is different. it's a majority according to the polls. this will take away one factor that has made investors quite positive a few years ago. in the previous election there was just one party. that means strong reforms have which happened by and large. but now, if people vote according to the surveys that chances are that may prevent it. and second point is about the cycle. it's quite mature. they have been growing strongly up until now but you correctly mentioned that the pmi for example is at the low over the past almost two years or so. in italy on the other hand the cycle is quite young. they're just starting to grow. next quarter, the quarter after next, growth is low but markets like the acceleration in growth which is more there and momentum
on the other hand is quite strong. >> thank you so much for that. european economist at morgan stanley. by the way, morgan stanley says portuguese equities are a buy but stay cautious on the debt. moving on, president ball balm h -- obama signed a bill. the house also passed a co companion bill. but they're not expected to act on it effectively killing the bill. the white house released a statement saying americans deserve far better than last minute short-term legislating. >> they launched an insider trading probe into the leak of sensitive information from the fed back in 2012. they're also looking into whether anyone violated insider trading rules when the firm at the center of the probe
disclosed to clients details about the fed's plans for more stimulus but they're claiming it's a media organization making it entitled to special protections under the law. >> christine lagarde says the prospect of rising interest rates could spell more volatility for emerging markets. speaking to sarah eisen she said the hike would have spill over effects for emerging markets. >> as far as the fed is concerned we're very pleased to see the decision will be data dependent. we think that's very very good. we don't see much movement on the inflation front. nor on the wages front. we're also interested to see that the international scene is perceived as likely to have domestic effects and may have been factored into the thinking. so we're not asking. we're just saying data dependent, perfect.
>> but you did previously say perhaps it would be prudent to wait until next year. >> we said that the best thing is to move and not to have to move back. so when the data and the inflammation are well and good when there is certainty, then fine. but no rush. >> it's not there yet, you're saying. >> we are not seeing it and i don't think the fed is seeing it either. >> janet yellen is still talking about an interest rate increase this year. would that be a mistake? >> i wouldn't say that. i'd say that, again, let's make sure that it is data dependent. if the data are not telling that story of inflation rising a bit by december then why do it in december? because i think it should be data dependent and she has gone into what data and how it should be analyzed and so forth.
we were ill pressed and happy with that. >> some might say it's one little hike off of zero. 25 basis points. very easy policy, very acome y accomidative. what are you so worried about? >> we're not worried but it has to be at the source and receiving end as well. they have spill over effects and ramifications across the world. it might be 25 basis points increase which is very low, you're right. but it's a movement away from a trend that we have seen for nine years. the fed has not moved up for nine years. if it moves, moves once, it will move another time and so on and so forth. so it's an indication of a great thing. the u.s. economy is doing better. superb, but it is also spill over effects outside and it has an impact on exchange rate and the financial conditions of
those who are borrowing elsewhere than in the united states as well. >> and still coming up on the show, all hail uber. find out how the public is coming to the defense of the ride sharing app as it battles regulators across europe. >> we take a look at what microsoft and google are calling a truce to their five yearlong dispute and keeping the magic alive after a decade on the disney thrown. we find out what bob iger is planning for the rest of his tenure. we'll be back in two. it's one of the most amazing
bob iger is celebrating ten years as the ceo of disney this month. they made several notable acquisitions including pixar and marvel and lucas films. the company is one of the most reputable companies in the world every year since 2006. for today's viewer exchange as bob iger does celebrate that decade at the helm if you were a disney character, who would you be and which characters match up best also with the global and economic business leaders around the world. get in touch with us.
that's the e-mail address or on twitter. of course snow white for you carolyn. >> we had a lot of fun with this. kept us sr. entertained this morning. i want to see your picture. who are you? >> i did recently dress up as pinnochio. >> oh, you did that recently? i thought you were a child. that's very recent. >> okay. now put the fake nose on as well. >> obviously. it does really reflect on your personality. >> it's not really fair personality wise. >> it's not quite there. >> and more ideas coming. another one for me is bfg. oh, thank you very much guys. prince charming. i'll take that. bfg interesting i was going to mention because there's a new film coming out next year from disney. one to watch. so do get your suggestions.
the character i'd most like to be compared to, lion king. >> who. >> the king at the top. lion king is my favorite and do you know who does the voice? >> no. >> same person that does darth vadar. james l. jones. >> slightly different tone. >> similar. you can hear it coming through. disney. get in touch. which are your favorite characters. which character would you have liked to have been? let's move on and talk glencore which reportedly spent yesterday afternoon behind closed doors for investors to reassure them about it's financial health. the commodity giants head of capital markets and investor relations spoke to 40 investors in london in a bid to convince them that the company's liquidity and cash positions are stable running through the details of various lines of credit. a separate report suggests the traders are now quoting glencore
debt like junk bonds. >> shares in k plus s are trading higher providing details of how potash is trying to sweeten it's bid for the german miner. the canadian company is offering them two positions on its board and promising to build centers in germany. no new approach has been made and that is very much true. so there's no new approach but what we're learning today is what was in that original offer that dates back to the beginning of august and this was made public to the german newspaper through a shareholder advisory group that works for him in germany. so he pointed out some of the sweeteners. so they're not new but it's the first time the public is hearing about it. it might be the r and d center in germany. they're offering all the management of k plus s jobs after a potential acquisition with better pay. two managers could move into the
potash board but as we pointed out previously, potash needs k and s more than the other way around. >> which the share prices would point to year to date but that 7% move we've seen is more because it's reminded investors that this deal is still a potential. there's no particular new bid or anything like that but the original bid is august 6th or 7th and slightly dropped below the radar the last few weeks and coming back on investors screens again today up 7%. >> let's also talk about altice which launched a capital hike to help enhance it's acquisition of cablevision. >> that's a 10% capital increase in order to finance part of the acquisition of cablevision. jp morgan is the coordinator and
book runner for the deal. certain managers of the company already announced that they will subscribe to this capital increase and this morning altice announced it is in order to finance most of the acquisition of cablevision. in a statement it says that this acquisition is based on the rates. 7.6% and almost on 8 year. this announcement comes after altice shares have been under pressure since the beginning of the week on concerns that the company may have too much debt and we're still negative this morning on altice. the shares are trading lower in amsterdam. they're down more than 5%. >> thank you for that. now the last half an hour a saudi envoy demanded that russia stop it's bombing campaign in syria. it comes after the united states disputed moscow's claims that it's air strikes are targeting
islamic state forces only. russias actions risk inflaming the civil war. >> i want to be careful about con if i recalling information but it does appear that they were in areas that were probably not isil forces and that is precisely would be of the problems with this whole approach. >> we're joined by senior associate. good morning. thank you for coming in. do you think it's pretty clear that the russian-led air force strikes they're really hitting the rebels rather than isis. >> well, i think when we look at the initial targets of the russian offensive, this tells you all you need to know about russia's short-term strategy is very much pro assad first and anti-islamic state second. but the long-term status it's
all about it's presence on the mediterranean coast. so far that's been protected by t the assad family but this is an interest that will out live the regime and syria's existence as a nation state. >> how is putin selling this at home because we know that every international initiative he has taken has been dpegeared towarde domestic audience much more than the international audience. do you think lit give him a hike in it's popularity ratings? >> there's not much to know. he's selling this as an anti-terror operation. it's a war on the cusp of russia's boarders so russia has been a victim of a lot of terrorism and it's seen as something that can unite the
international community and russia together for a common purpose. >> is there a risk that this could escalate between the west and russia or is it a clear separation of what both teams are doing on the ground in syria. there's not going to be a clash directly between them. >> certainly russia's entry into this conflict exposed some divisions among the european powers, italy has come out strongly and said russia should play a central role. other countries a bit more lukewarm so on a rhetorical level there is this case but i think, you know, on the whole what we're hearing from our investors is so far this isn't going to be a very big game changer so long as russia's engagement remains contained to air strikes. >> let's link it to investors then because of course oil prices are up a little bit today but nothing marketed and the ruble as well. there hasn't been much reaction.
>> trading has been neutral to this. often times these kind of strikes lead to spikes in oil prices. not this time. that would obviously maybe have benefitted the russian economy. the economist and other people we have spoken to on the ground they tend to agree that the impact is going to remain limited. but there may be some benefits to the russian economy in terms of the arms industry that has been sort of hit by the sanctions and gaining a boost. >> thank you so much for that. >> thank you very much. >> still to come on the show, a taxi delay of a different sort. we catch a ride to paris and get the latest from the uber executive's trial.
a global relief rally kicks off october. stocks in asia and europe defy weak chinese data and trade in the green with us. futures pointing higher. >> shares rally on a report on how canada's potash is sweetening it's takeover deal. but the firm tells cnbc no new approach has been made. >> shutdown averted. u.s. lawmakers push through a temporary bill but the stage is set for another budget battle in early december. >> russia disputes claims that war planes were only targeting islamic state forces in syria.
the pentagon warning russia's involvement will inflame the civil war. let's bring you u.k. data to september manufacturing pmi falls to 51.5. coming basically in line with expectations. in fact, bang on in line with expectations. that was where it was expected and where it was last month as well. in the sub index, the jobs index within manufacturing pmi did fall to 49.9. that's the lowest since april 2013 but the headline number in line with expectations. in sterling as you can see risen a little bit off the back of that. it's up ten basis points today. 151.48. >> let's check in on european equity markets and we're higher for a second day in a row. this is after we came off the worst quarter since 2011 was bruising losses across the
board. the ftse 100 up by more than 1%. the minors and the autos helping the ftse and dax respectively. the cac 40 also pushing up by 1.3%. >> let's have a look at bonds because at the start of this week we had a little bit of risk off sentiment. that did see yield compression. the 10 year note in the u.s. at 2.05 having been up around 2.15 at some time. the ten year bund around 0.6. there has been bond buying this week. despite the huge volatility in equity markets currencies for the most part over the last couple of weeks have been more stable, certainly relative to other asset classes. the euro, 11158 and the yen 120.06. >> all eyes on that jobs report. anyways, president obama signed a stopgap spending bill averting a u.s. government bill as well.
giving congress and the president ten more weeks to craft a longer term budget bill. >> in the end it was a bipartisan vote. 277 to 151 to kick the can down the road and prevent a government shutdown tonight at midnight east coast time here in the united states. ultimately this is going to be refought all over again on december 11th or in the days leading up to that date. more republicans tonight voted against the measure than voted for it but all of the democrats voted for it and that's what gave them the votes they needed to keep the u.s. government open and functioning now for another couple of months. the big question here of course. what happens gnat run up to december 11th? particularly because we have now seen the resignation of speaker of the house john boehner. boehner then gaining the political flexibility to cut this deal with democrats on a short-term basis. his successor however expected to be kevin mccarthy, a
republican of california will have to deal with a republican conference and figure out a way to keep the u.s. government open even though the hardcore of conservatives in his base sent a very clear message here by deposing the previous speaker of the house that they want republican leadership that will fight with president obama and not cut compromised deals. in a time that is going to call for a compromise deal that's going to be a very tricky situation for the next speaker of the house. back to you. >> all right. let's switch focus and look at asia. confidence among large japanese manufacturers weakened in q-3. over the last week we've seen japan fall back into inflation. a surprise contraction in industrial output numbers and slow down in retail sales growth. the data raised expectations of more easing from japan's central bank but investors brushed off the data with the nikkei closing higher for a second straight day linked to that expectation of
possible extra easing. we're up 1.92% today. meanwhile, there was more weak data out of china as well with the country's manufacturing pmi falling to a 6 year low in september. the gauge for factory activity contracted to 47.2 last month. it's worst reading since march 2009. joining us is gavin perry, managing director, good morning to you. thank you for joining us. let's kick off with china. how bad is that pmi data? >> well, we look at it as a positive cannibalization. the underlying policy coming out of beijing is urbanization. so you need an increase in services. while we're still seeing a steady constant growth we're seeing that as positive to the old world economy of manufacturing. >> well, perhaps but that's a very long and painful process to go through and, you know, linked with investment lead to consumption led similar as you're saying from manufacturing lead to services lead.
can they get through that transition? or are they underestimating how long and how painful that will be? >> it will be very painful. the switch from basically investment led or driven economy which is very much the export side of things. we have been in hong kong 16 years now so what we have seen is beijing has the propensity to learn quite fast. they had inflation and interest rates jacked up and they came in and used broad monetary policy. we're seeing a lot more micromanagement to the economy. so even in relation to the current situation with the stock market the learning curve will be more on the micro side of things so hence we're seeing them moving those policies. it's going to be painful but it's something that they are going to do and we do pop through that. >> the question that everyone is asking is are we going to see more monetary policy stimulus
and, if yes, is it effective? >> well, the pboc doesn't have a lot of room to move right now. we definitely think it's a reformed premium coming back into the market and last night decreasing the minimum deposits for real estate is a really big thing because the hard asset prices in china, the real estate market has been a conundrum so where we've seen them draw down their inventories we're hoping we'll see a puck up in transactions in the real estate injury which then again factors into the governments. that's where they get most of their revenues. >> i would think the bigger stimulus would be the weaker yuan and we haven't seen that reflected because that was too close to the actual devaluations. at what point is that going to feed through or are you wrong in saying this is big stimulus?
>> no you're not wrong. this is a transition period. it's not a short-term thing. it's a long-term thing and one party political system they're long-term thinkers here. so it's a transition. there's lead time in with the depreciation and we see it depreciating more because of the outflows in china but we do believe the reform premium will come back into the stock market. >> let's have a clear comment on japan as well. effected by the global growth slow down but is it a bigger factor, domestic issues in japan and what should they be doing next? they tried so much already and it's just not working? >> we coin the third era the unicorn era because it's spoken of but rarely seen. there's real wage growth and capital expenditure. it's worth noting that a lot of these, like, toyota doing big cap ex late last year, most of it goes overseas because the
manufacturing plants are overseas. it's the basis -- you are basically qe blowing out the money base. you have indirect and direct taxization and effectively the consumer weighed on it at the moment because they don't have real wage growth and it's destroying domestic purchasing power so the problem is they don't want to put their hand in their pocket until they see solid domestic demand before they go up and do real capital expenditure and the other conundrum is its not labor economics 101. i think it was last year they offered 10,000 employees jobs for life again. so there are other mechanisms they can do to ensure that their cost space doesn't become a legacy. >> okay. gavin, thank you for joining us. much appreciated. managing director at perry international trading limited. volkswagen implemented a hiring freeze at its financing unit. they also cancelled the shift as it prepares for the impact of
the emission scandal. vw financial services which provides loans to car buyers and leases vehicles said the hiring freeze will be in place for the remainder of 2015. >> meantime t board is considering options to support the company's credit rating. cost cuts and capital raising are reportedly just some of the options on the table. it comes after ratings agency moody's gave vw a negative outlook. shares up by 4.4%. still to come on the show, we have all the details next. we'll be back in two.
twitter is expected to name jack dorsey as it's permanent ceo as soon as today. he will also continue as ceo of square. the digital payment company he co-founded. he's been serving as twitter's interim ceo since july. the board said it wouldn't consider anyone who was running another company but re/code says twitter and square investors began to lobby for him to share head of both firms.
twitter closing up 5% yesterday. >> microsoft and google are burying the hatch chet. they were settling 18 cases in the u.s. and germany. the deal ends court fights involving a number of technologies. the companies are also dropping litigation which google sold last year but still holds it's patents. in german trade, microsoft up by 1.9%. google a shares up by 0.9%. we don't know how much money changed hands here but you have to wonder how much that was. i don't think they just bury the hatch chet over, i don't know, coffee and pastry, did they? >> i'll sure there's an underlying agreement. i'm surprised how much news coverage this story has got. clearly two big u.s. tech titans coming together. it's of interest but i think, you know, these kind of pattern infringements are filed every
single day by these companies and very few of them end up going to court in a big, big way. so the fact that they have come to an agreement and it's come now, maybe the timing is a little surprising but it's not ground breaking stuff in my opinion. >> do you know what would be ground breaking? if we saw apple and samsung bury the hatchet. i want to see that happen. >> but even still they have done that because they know it's not worth either of their interests going through long protracted cross border legal cases and it's easy to come to an agreement. >> it's more about reputation too. >> meantime, microsoft is set to open it's first flagship store in manhattan on october 26th. the five level store is located several blocks south of apple's flagship store. it has some features similar to an apple store including an answer desk for technical help and a community theater where customers can learn to use microsoft products. >> do you think they'll get the same vibe as an apple store?
>> i don't see it. microsoft doesn't have the ecosystem or the buzz. it's not as cool, is it? >> it isn't. they obviously make lots of hardwear now but particularly they're a software company. >> you don't go to buy software. >> and you don't feel really cool when you come out with a software. you don't go showing off to your friends saying look what i just bought. >> i'm going to new york in november. >> will you bring me back some software then. >> i will. >> under fire transport firm uber managed to secure delay of a french criminal trial against two of its executive who is are accused of license valuation. let's get out to stephan with more. >> the trial has been postponed until february next year in order to conduct expertise so it's just a technical delay but the two managers will face the same charges when the trial will resume next year including an illegal taxi service and use of personal data without the
consent of the french privacy watchdog. the trial is related to the car sharing service which was banned by the french government last year but despite the ban, uber refused to suspend the service until the beginning of july when the two managers were arrested by the french police. in theory they could face up to two years in jail but they believe they are more likely to get a financial pebbnalty if convicted and could also face suspended jail sentence. for the french government, it's an interesting and also risky story. they will not ban uber for two reasons. first is there's a real demand for service in paris. there's a demand and public support for uber and it's
competitors and secondly because it's a symbol of the new company like airbnb and the city of paris tightened the conditions for people to rent their flat on airbnb. it could send the wrong message that france is turning it's back to the new economy at the time it wants to attract more investors and companies in france. so uber is a symbol and probably the government is aware of it. >> thank you. uber also hitting the news here in london where the taxi app is asking it's customers to sign a save uber position which could result in a major clamp down on the way uber operates and has been front and center in the news the last couple of days. i have to say i'm on the uber side of this argument. they have been slow to respond to the changing technology. one issue annoys me in
particular. >> what's that? >> when you come to pay for your fair in a black cab, none of them accept cards. >> some do. >> it's a bore even to take out your wallet to pay, but certainly to pay in cash. that's one of the biggest benefits of uber. you don't do it. but added to that the fair is 8 pound and you hand over a 20 pound note and they look at you haven't you got any better change for me and i'm like no i don't. that sums up that there's a stubbornness to change and refusal to move with the times and frankly uber got it right and peel do what they want to do but this is very slow to change. >> i do agree with you. the institute of directors represr represent thousands of top bosses across britain. they also ban services for
example. this is good for business. this is good for the consumers. that's why we live in london. that's why we don't live in paris, right? because we want to be open to change. we want to be open to disruptors. one thing i will say though, you will have noticed an increase in traffic as a result of the uber cars. that's something you're seeing in manhattan and london. a lot more traffic. >> long-term note should decrease traffic. >> i'm not sure. >> if it leads to people driving less ride sharing will lead to less traffic. in general governments tend to support it apart from the union-type opposition. tfl, transport for london overseen by the mayor of london. elections come early next year. this will be a big issue. typically of course an issue of corporate relevance isn't usually in political cam pains but this is a big factor that annoys various people in london that could be an interesting one to watch. >> well, he was very complimentary of uber when he
spoke about it. >> but thankfully he's not a candidate for london mayor. let's move on. >> a federal judge in wyoming has granted a preliminary injunction against the u.s. governments rules for fracking on public lands. the judge had put the regulations on hold in june while he weighed a request from energy industry groups to stop them from taking effect until their lawsuit was resolved. the rules would require companies to provide data on chemicals used in fracking and take steps to prevent leaks from oils and gas wells on federal land. meantime, wti and brent crude higher along with other commodities hitting new 52 week lows in the 3rd quarter but brent crude up by 1.3%. wti crude closed down over 24% for the third quarter. it's worst performance since the 4th quarter of 2014 when it lost
40%. joining us is neil atkinson. look, have we hit a bottom here? >> we have might have simply because the brent price, the wti price have both been stuck in the mid to upper 40s since about the beginning of august. they haven't gone anywhere. a little bit up and a little bit down. what we're looking at at the moment is two things. number one, u.s. oil production lead by fracking which you were referring to a second ago and i think wyoming, by the way, may be closing the stable door after the horses but u.s. production seems to have peaked back at june at 9.6 million barrels a day. u.s. oil production is over 9 million barrels a day. it's fallen 600,000 in a few months. on the other side of the balance what we're seeing is global demand fwroegrowth prospects ar being revised upward.
partly for prices we've seen over a year or so. we have falling supply from non-opec countries and rising demand growth from around the world. not least of course in the united states. a bit of uncertainty about china so we may welsey that this rebalancing of the oil market which people have been looking forward to for sometime might now finally be under way. so we might have hit the bottom. >> but even if we might have hit the bottom and might stabilize from here. thus maybe not have a big fall. are we going to recover from here? opec supply is showing no signs of changing their strategy. >> no and what they're doing is essentially waiting, hanging in there until the market is rebalancing and demand growth is rising. non-opec supply. the forecast is that it's going to fall year on year and that's the first time that's happened for a long time. and yes, the opec countries are
continuing to produce at high levels. they're continuing to fight for market share and they're basically hanging in there for better days which might be coming. >> and of course that's just your traditional supply and demand diali demand dynamics we have been exploring. this huge volatility, we're getting close to a fed rate hike and the like. is that directly effecting oil markets as well? >> it's a factor but it's a chicken and egg argument and it's very very hard to be definitive about it. from my own point of view i focus essentially on the fundamentals because i think ultimately it's the fundamentals which are going to drive the direction of oil prices with influence from financial market factors but it's the fundamentals which are now possibly changing but there are some warning signs still from within opec itself as you mentioned a second ago, not least the fact that iran may well be coming back into the oil
market with more barrels in the first part of 2016. so lots of risk factors but in the last few week which is the markets have been telling us, certainly since about the beginning of august when brent is traded between 45 and 50, wti, slightly lower, 2 or $3 barrel lower is that the price has not gone down. hasn't gone up either. but it certainly hasn't gone don. >> i want to bring in the geo political angle because i'm looking at new reports saying that russian jets are targeting positions of the army and conquest and alliance in northwestern syria. the bounce that we're seeing in oil prices today do you think a tiny bit of that is the geo political premium? >> it might well be but throughout the whole of the syrian conflict, it's influence on oil markets has been -- has actually been essentially zero. syria was a significant oil producer but not that important
and i don't think today's rise in the prices has that much to do with the russian action. >> iraqi production continues relatively well. >> yeah, this is the thing. isis control depending on your view, 30% of iraqi territory, whatever it is but they don't control the southern part of iraq which is where the overwhelming majority of iraq's exports are going from. oil industry operations have continued fairly well uninterrupted throughout the isis period and iraq has plans to increase production and exports even more in 2016 and that is in addition to the iranian barrels coming in is another factor which may well limit any growth in oil prices that we think might happen. >> neal, thank you for joining us. much appreciated. >> right. bob iger is celebrating ten years as the ceo of disney this month with iger at the helm disney made several notable acquisitions.
pixar, marvel and lucas films. the company is one of the most reputable companies in the world every year since 2006. with that ten year milestone we are asking you the question, if you were a disney character, who would you be? and we have been getting you to get in touch with us so far this morning at cnbcwex. recently i dressed up as pinn pinnochio. do continue to get your tweets in. here's one of carolyn as snow white i think which is a very apt character comparison. >> you're so sweet. >> we're going to go to break. get your suggestions in. much more markets discussion in two minutes.
>> a global relief rally kicks off october. stocks in asia and europe defy weak chinese data and trade in the green with u.s. futures also pointing higher. >> washington disputes moscow's claims that it's war planes are only targeting islamic state forces in syria. the pentagon warning russia's involvement will inflame the civil war. >> shutdown averted. u.s. lawmakers work right up to the deadline to push through a temporary bill but the stage is set for another budget b